Other Words from acquisition

Synonyms for acquisition

Examples of acquisition in a Sentence

Steven Schwartzman, the billionaire CEO of Blackstone, suffers no personal liquidity problems. But his firm, and others like it—have had to call off a series of proposed acquisitions because they can't get financing.— Daniel Gross, Newsweek, 3 Mar. 2008The gifting of books, too, endured as a legacy of our book hunting. I quickly learned not to ask for newly published books as birthday or Christmas presents, since they provided my father with too little of a challenge. The measure of a gift's value was the amount of thought and effort that went into its acquisition.— Charles Mitchell, Bloomsbury Review, November/December 2002Although some believe that the rise of advertising and strip malls have fostered slavish devotion to shopping where it didn't exist before, Hine posits that the acquisition of objects has a firm place in humanity's history. — Publishers Weekly, 7 Oct. 2002McKnight and Ward, free-agent acquisitions who each have only one full season as a starter, have brought much-needed speed to the position. But rookie Chris Chambers, a second-round draft pick from Wisconsin, is the jewel.— Jeffri Chadiha, Sports Illustrated, 1 Oct. 2000
the country's acquisition of new ships
The big company's newest acquisition is a small chain of clothing stores.
The museum has put its latest acquisitions on display.

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'acquisition.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

The first known use of acquisition was
in the 15th century

Financial Definition of acquisition

An acquisition is the purchase of all or a portion of a corporate asset or target company.

How It Works

An acquisition is commonly mistaken with a merger – which occurs when the purchaser and the target both cease to exist and instead form a new, combined company.

When a target company is acquired by another company, the target company ceases to exist in a legal sense and becomes part of the purchasing company. Acquisitions are commonly made by using cash or debt to purchase outstanding stock, but companies can also use their own stock by exchanging it for the target firm's stock. Acquisitions can be either hostile or friendly.

For example:

Let's assume Company XYZ wants to acquire Company ABC. Company XYZ starts to buy ABC shares on the open market, but once Company XYZ acquires 5% of ABC, it must formally (and publicly) declare to the Securities and Exchange Commission (SEC) how many shares it owns. Company XYZ must also state whether it intends to buy ABC or just hold its existing shares as an investment.

If Company XYZ wants to proceed with the acquisition, it will make a "tender offer" to ABC's board of directors, followed by an announcement to the press. The tender offer will indicate, among other things, how much Company XYZ is willing to pay for ABC and how long ABC shareholders have to accept the offer.

Once the tender offer is made, ABC can accept (1) the terms of the offer, (2) negotiate a different price, (3) use a "poison pill" or other defense to avert the deal, or (4) find another company, who hopefully will pay as much or more as XYZ is offering, to buy them.

If ABC accepts the offer, regulatory bodies then review the transaction to ensure the combination does not create a monopoly or other anti-competitive circumstances within the industries involved. If the regulatory bodies approve the transaction, the parties exchange funds and the deal is closed.

Why It Matters

Companies acquire target companies as a growth strategy because it can create a bigger, more competitive, and more cost-efficient entity. This synergy -- the idea that the two companies together are more valuable to the shareholders than they are apart -- is elusive, but it is the idea used to justify most acquisitions. A well-executed acquisition can be the crowning jewel of a CEO's career.

Knowing how to analyze acquisitions can put individual investors in a great position to profit from the stock price fluctuations that accompany them.